Most Consumers Have No Plans to Cut Digital Entertainment Budgets – NPD Group

According to Entertainment Trends In America, a tracking study conducted by market research company NPD Group, most consumers plan to hold steady or increase their entertainment spending in 2009.

“Even in the face of a down economy, entertainment remains a popular spending category. Most consumers say they’ll continue to purchase at least the same amount of many entertainment categories in the coming year,” said Russ Crupnick, entertainment industry analyst for NPD.

According to the NPD report, 75% of consumers surveyed said they will spend the same amount or more on digital music downloads as they did in 2008. 65% will spend the same or more on video games, and sixty percent will spend the same or more on CDs. Nearly three-quarters – 73% – of consumers expect to spend the same amount or more on theatrical movies; and based on comparison to last year’s statistics, the theatrical movie category appears to be in the best position for growth, as only 66% of survey respondents said they would spend the same or more last year.

NPD reported 51% of consumers surveyed purchased a DVD or Blu-ray disc in the prior three months. Purchasing a console or portable video game ranked second at 36%, followed by purchasing a CD at 31%.

According to “Entertainment Trends in America”, current per capita spending on entertainment in the U.S. is $160 per month, with the bulk of that spending going to dedicated subscriptions mostly related to TV and Internet access. Despite predictions that consumers would trim entertainment subscriptions, the only notable decline in spending NPD observed were for magazines and newspapers.

Even though the entertainment industry appears poised to ride out the recession better than others, the analysts advise caution.

“There is anxiety about the economy among entertainment buyers, increasing use of unpaid digital options for entertainment and competition for the entertainment dollar, but consumers have clearly shown that compelling content will get them back into the stores or theatres,” said Mr. Crupnick.

It should be noted that the information was derived from The NPD Group’s “Entertainment Trends in America” tracking study, which is based on more than 10 000 completed responses from the U.S. consumers. The final survey data was weighted to represent U.S. population aged 13 and older.